The October futures contract of Aluminium in Multi Commodity Exchange (MCX) was gradually declining throughout September. It declined from about ₹148 to ₹142 per kg. However, the contract took support at ₹142 in early October and has been rallying since then. The price crossed over the crucial level of ₹150 last week and went on to mark a fresh high of ₹152.8 before moderating towards the current level of ₹151.
The price action in the daily chart shows that the bulls are strong as the declines are being bought into – shown by longer wicks in the bottom of the candles of past few trading sessions. So, the contract is likely to cross over the prior high and advance towards ₹154. Above that level, it can climb to ₹156.
The bullish bias is supported by the relative strength index and the moving average convergence divergence indicators in the daily chart as they both remain in their respective bullish zone. Considering these factors, traders can be bullish and initiate fresh long positions in dips with stop-loss at ₹148.